Dive Brief:
- Facing a “steep” cash shortfall, California-based University of Saint Katherine is closing and will file for bankruptcy, President Frank Papatheofanis said in a letter to campus posted on social media last week by one of the institution’s sports teams.
- Behind the private nonprofit’s crunch in operating cash is “extraordinary inflation,” including salary increases, as well as high institutional financial aid, the president added. He did not immediately respond to a request for comment.
- Papatheofanis sent the letter announcing the closure on Thursday, the same day the university planned to cease all operations and employment. It will “pursue and consider any opportunity we can identify” while going through the bankruptcy process, Papatheofanis said.
Dive Insight:
Before ceasing operations, Papatheofanis and the board “vigorously explored multiple options that might allow us to continue,” the president said in his letter.
But the abrupt closure came as a surprise to students. The San Diego Union-Tribune reported that students and faculty were packing up belongings on campus Friday. One student told the newspaper that she was supposed to graduate in May and now didn’t know if there would be a ceremony, adding, “This is shocking.”
In a statement emailed to Higher Ed Dive, Jamienne Studley, president of WASC Senior College and University Commission, the university’s accreditor, said that it expected Saint Katherine to satisfy its teach-out requirements and help students transition to another institution.
“We are closely monitoring the institution’s compliance with accreditation requirements, including student rights and information,” the Studley said.
The university, which describes itself as Orthodox Christian, was founded in 2010 in San Marcos. It offered nearly 20 bachelor’s degrees in the liberal arts and sciences, as well as three master’s degree programs, including theology.
In 2022, WSCUC commended the institution for growing its enrollment, even during the early years of the pandemic.
WSCUC further praised Saint Katherine on a new “aesthetically pleasing” space, new online master’s program and a connected university community.
At the time, a commission official also noted the university needed to develop “a sustainable financial posture” that would be future-looking, account for “sufficient resources to support institutional growth” and maintain healthy cash flows.
In the 2022 fiscal year, Saint Katherine faced a deficit of nearly $212,000, even after significantly increasing its revenue and posting a surplus the prior year, according to tax filings. The college was discounting its tuition by more than 40%, according to its latest auditor report.
From 2017 to 2021, Saint Katherine nearly doubled its enrollment, which rose from 137 students to 267, according to federal data. However, from 2021 to 2022, enrollment fell 13.1%.
While its website does not currently mention the closure, the university’s “Apply” page says that Saint Katherine is not accepting applications.